Left at the Altar? An Analysis of Merger and Acquisition Announcements in the 1990s

Ruth V. Aguilera, John Dencker and Xavier Escandell
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Ruth V. Aguilera: U of Illinois at Urbana-Champaign
John Dencker: U of Illinois at Urbana-Champaign
Xavier Escandell: U of Illinois at Urbana-Champaign

Working Papers from University of Illinois at Urbana-Champaign, College of Business

Abstract: This paper analyzes data on the largest mergers and acquisition (M&A) announcements in the 1990s and the contextual factors that determine their completion or withdrawal. Drawing on institutional theory, we argue that the completion of an M&A is more likely to the extent that the institutional logics involved at the country-level, industry-level and organizational-level create less integration uncertainty. In addition, we also propose that acquirers' organizational experience will reduce integration uncertainty and consequently will increase the likelihood of deal completion. Our findings highlight the incomplete nature of financial economic accounts when institutional logics are not accounted for, and illustrate the cumulative nature relationships across institutional levels. We conclude by discussing theoretical and managerial implications of our multi-level institutional model.

Date: 2004-11
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:illbus:04-0117

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